Remortgage

The process of changing your existing mortgage to a new lender or a deal whilst staying in your current home. You pay off the old mortgage with the proceeds from a new mortgage and the new lender continues to use your house as security.

AllCity Finance

Remortgage

When is the best time to remortgage?

The best time to remortgage is 3 months before your current deal is due to expire. Within these last 3 months your lender will normally allow you to change products and rates without costing you any Early Repayment Charges or fees, especially if you are staying with them.

If you are remortgaging to another lender or raising money for whatever reason, 3 months is good enough time to find a better deal and complete before your fixed/discounted period ends and you move to the lenders standard variable rate (SVR) which is more expensive. The new lender’s mortgage offer will last up to 6 months so the earlier you start the more time on your side. Once you check what rates are available to you, use the remortgage calculator to see how much you can save when you change rates.

Six Reasons to Remortgage

There are several reasons that people look to remortgage, and these reasons will naturally then affect which remortgage deals are appealing

1. To Get a Better Rate

Better rates = lower monthly payments.
Use a remortgage calculator to see how much you can reduce your monthly payments.

2. Moving to a better lender

There was a lot of people who took out mortgages pre the market crash in 2008. Those mortgages were at rates that weren’t favourable and with lenders that are no longer operating. After the crash the lender may have closed and sold their clients onto another lender. If you are one of these people you will want to remortgage to move to a stable less subprime lender.

3. Home Improvements

Remortgaging and raising capital to use to improve your current property. Not only could borrowing against your property be the cheapest way of raising capital, but doing a loft/basement conversion, adding a extension or adding new kitchen can increase the value of your property substantially. Use the calculator to see how much you can borrow and what the monthly payments will be.

4. Debt Consolidation

If you are paying high interest on unsecured debts, or you have a second charge loan on a higher interest or you have other finance, remortgaging and capital raising at a fixed lower rate will enable you to pay off other debts and bring total monthly payments right down. Turning unsecured high interest debt into a secured, manageable low interest payment.

5. Buying more Shared ownership % / Paying off Help-To-Buy loan

Did you take advantage of one of the property buying schemes to help purchase your house? If so you will need to think about paying off the amount you have borrowed or purchase more of a share of your property. If your financial situation has improved and you are able to borrow more money, remortgaging and rasing capital is ideal to achieve this.

6. Equity Release

If you’re property has increased in value by itself or as a result of home improvements, then your Loan To Value (LTV) would have decreased. Lower LTV = Higher equity. This means you can either qualify for lower mortgage rates or you might want to transfer some of this equity into cash for you to use.

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Our Mortgage Calculators

We have a range of calculators to help make things simpler for you, from finding out how much you can borrow to calculating the impact of an interest rate change on your repayments. Have a go.